Assessing the contingent effects of collaboration on agility performance in buyer–supplier relationships

Several studies in the buyer–supplier relationship literature have addressed the impact of collaboration on agility performance. While some studies have concluded that collaboration leads to beneficial effects, others have questioned the positive effects of collaboration on relationship performance. Drawing on contingency theory and transaction cost economics (TCE), we seek to better understand the linkage among collaboration, trust and agility performance in a buyer–supplier relationship. Further, we study the contingent influence of requirements certainty and supplier asset specificity, two key TCE constructs in buyer–supplier relationships, on the collaboration–agility performance relationship. We show that while trust mediates the impact of collaboration on agility performance, the indirect effect of collaboration on agility performance via trust is significant only beyond a threshold level of collaboration. The theoretical implication of this result is that the performance relationship is non-linear, a result that has not been recognized in current literature. The practical implication is that organizations need to establish a certain level of collaboration before its positive impact can be realized. In addition, we show that the impact of collaboration on agility performance in buyer–supplier sourcing relationships can be positive, negative or neutral depending on the levels of trust, supplier asset specificity and requirements certainty, emphasizing the need to develop contingency theories.     

The impact of cultural differences on buyer–supplier negotiations: An experimental study

In today's global economy, an ever-increasing number of companies are dealing with international partners, instigating a need to understand the impact of cultural differences on business interactions. Using Hall's distinction of high- and low-context culture, this study investigates the direct and moderating effects of cultural differences in dyadic buyer–supplier negotiations. Theory is developed regarding the impact of culture on joint profits, juxtaposing Transaction Cost Economics and the Relational View. The theory is tested with a negotiation experiment. Participants, classified by their country of origin, negotiate prices and quality levels for three products. This study finds that cultural differences within the negotiation dyad reduce joint profits when compared to dyads of participants with similar cultural backgrounds. Cultural differences also moderate the impact of trust and bargaining strategy on joint profits. Overall, this study concludes that cultural differences, as encountered in day-to-day business interactions in global supply chains, significantly impact negotiation outcomes.     

Supplier–supplier relationships in buyer–supplier–supplier triads: Implications for supplier performance

A growing number of studies and evidence from industries suggest that, besides managing the relationship with its suppliers, a buyer needs to proactively manage the relationships between those suppliers. In a buyer–supplier–supplier relationship triad, the buyer, as the contracting entity, influences the suppliers’ behaviors and the relationship between them. By considering the relationships in such a triad, we are able to gain a richer and more realistic perspective of buyer–supplier relationships. In this study, our goal is to examine supplier–supplier relationships in buyer–supplier–supplier triads, focusing on how such relationships impact the supplier performance. We frame the supplier–supplier relationship as co-opetition—one in which competing suppliers work together to meet the buyer's requirements. We investigate the role of the buyer on such relationships, and how the buyer and co-opetitive supplier–supplier relationships affect supplier performance. We find mixed empirical support for our hypotheses. However, we are able to demonstrate the dynamics of supplier–supplier co-opetition in the buyer–supplier–supplier triad. We point out the need for further studies in this area.     

The interaction effect of relational norms and agent cooperativeness on opportunism in buyer–supplier relationships

In this study, we examined the effect of relational norms and agent cooperativeness on opportunism in buyer–supplier relationships. Drawing from the theoretical grounding of transaction cost economics, personality trait theory, and contingency theory, we proposed three distinct perspectives on opportunism mitigation in buyer–supplier relationships: (1) organizationalist, (2) individualist, and (3) interactionist, where relational norms, agent cooperativeness, and the interaction between them, respectively, serve as the key predictors in these three perspectives. The results of replicated experiments indicated that relational norms and agent cooperativeness interact with each other in mitigating opportunism and that the interactionist perspective yielded the highest explained variance in opportunism. This suggests that the interactionist perspective, a multi-level theoretical lens encompassing the dynamic interplay between organization-level and individual-level factors, was a more complete model in explaining opportunism than either the organizationalist or individualist perspectives. The consensus which emerged from post-experimental interviews of purchasing professionals is that agent personalities play an important role in buyer–supplier relationships. Some purchasing professionals had observed that uncooperative agents or personnel turnover in the boundary-spanning functions can substantially undermine even established relational exchanges. These qualitative findings are in line with our theoretical arguments and experimental outcomes.     

Exploration of congruence in perceptions of buyer–supplier attraction: A dyadic multiple case study

In long-term complex buyer–supplier relationships, many exchanges are non-contractual, a factor that emphasizes the social dimension of the relationship. Previous studies have shown that attraction is a fundamental aspect of the social dimension and a main driver in non-contractual exchanges. Although attraction is a determinant of a relationship, many studies have examined the relationship only from the buyer's or supplier's perspective. Our study extends this research stream by considering the dyadic aspect of attraction and poses the following questions: Does the success of a relationship require that both parties perceive it to be attractive? How important is it to understand how the company looks in the eyes of the other party? In this paper, we explore the dyadic aspect of buyer–supplier attraction by analyzing six cases, two buyer firms and six supplier firms and by conducting a total of 43 interviews. By using cross-case analyses, we develop a set of proposals for explaining how congruence in perceptions of attraction affects relationship success.     

Examining supply chain relationships: Do buyer and supplier perspectives on collaborative relationships differ?

Firms are building collaborative relationships with their supply chain partners in order to achieve efficiencies, flexibility, and sustainable competitive advantage. However, it is unclear if collaborative relationships provide benefits that compensate for the additional expense associated with such relationships. Further, it is unclear what factors promote successful collaborations. This research examines collaborative relationships in two separate studies using structural equation modeling: one study examines buyers’ perceptions and the second study examines suppliers’ perceptions. The two studies are then compared using invariance testing in order to determine economic and relational factors that drive satisfaction and performance from each party's perspective. Results show that collaborative activities, such as information sharing, joint relationship effort, and dedicated investments lead to trust and commitment. Trust and commitment, in turn, lead to improved satisfaction and performance. Results from the two independent studies exhibit similarities and differences; while the conceptual model is highly similar, certain paths vary in their significance and/or their importance across buyer and supplier firms such that buyers focus more on relationship outcomes while suppliers look to safeguard their transaction specific investments through information sharing and joint relationship effort. Managerial and theoretical implications of the findings are discussed.     

The effect of unethical behavior on trust in a buyer–supplier relationship: The mediating role of psychological contract violation

Research on trust in buyer–supplier relationships has tended to focus on the performance outcomes of a trusting relationship, as well as the processes that serve to build trust. Largely absent from the buyer–supplier literature is an in-depth examination of activities that break down trust, and the resulting effect on supplier trust in the buyer. The authors propose and test a model that evaluates psychological contract violations between a buyer and a supplier as a mediating variable of the effect of unethical activities on trust within a partnership. Survey data was collected from 110 tier one suppliers of major corporations in the state of Ohio. Our results show how a supplier's perception of a violation of the psychological contract either partially mediates or fully mediates the relationship between the buyers unethical activity and the suppliers trust in that buyer. We discuss how suppliers may demonstrate bounded ethicality when they overlook perceived unethical behaviors by the buyer.     

Systematic review of sourcing and 3D printing: make-or-buy decisions in industrial buyer–supplier relationships

Management Review Quarterly - Additive manufacturing (AM) is regarded as a technology that has transformative and disruptive potential in nearly all industries. However, AM is not only about new...     

The influence of relational experience and contractual governance on the negotiation strategy in buyer–supplier disputes

This paper theoretically refines and empirically extends the debate on the type of interplay between relational experience and contractual governance in an under-researched area: supply chain disputes. We define relational experience as either cooperative or competitive; distinguish between control and coordination functions of contractual governance; and assess their interplay on the negotiation strategy used in disputes. Using a unique data set of buyer–supplier disputes, we find, in particular that increasing contractual control governance weakens the positive effect of cooperative relational experience on cooperative negotiation strategy. However, increasing contractual control governance for a buyer–supplier dyad with competitive relational experience will increase cooperative negotiation strategy. Contractual coordination governance reinforces the positive effect of cooperative relational experience. Through this study, we reach a better understanding of how and when contractual and relational governance dimensions interact; rather than whether they act as substitutes or complements as has been studied in prior research. We discuss the implications of these findings for the field of supply chain management.     

Formal control and social control in domestic and international buyer–supplier relationships

Focusing on long-term buyer–supplier relationships, this article addresses two questions: (1) What are the antecedents that lead to the adoption of formal control, social control, or both? (2) What is the nature of the relationship between formal control and social control - are they substitutes or complements? We develop a model to investigate the impact of the length of cooperation and institutionalization on the use of control mechanisms. Further, we argue that in China, formal control and social control may be substitutes in domestic buyer–supplier relationships, but they may be complements in international relationships. Survey data collected nationwide with executives in 380 domestic and 200 international buyer–supplier relationships in China are used to test our hypotheses.     

Relationship risk perception and determinants of the collaboration fluency of buyer–supplier relationships in public service procurement

Public service procurement effectiveness has been emphasized as a major challenge in recent years. Well-managed partnerships between buyers and suppliers are needed in this domain to achieve collaboration fluency and improve the effectiveness of procurement. The main objective of this study is to determine which issues managerial teams must emphasize when aiming to create a solid partnership based on pre-existing collaborative relationships. The originality of this study lies in the domain approached (public service procurement in social and healthcare services), as well as the variable it attempts to explain (collaboration fluency). The study investigates two major issues: firstly, how collaboration risk perception influences communication, trust, and the governance of a collaboration and, secondly, how these factors (communication, trust, and governance) affect collaboration fluency. The study is performed via a survey regarding the collaboration of the public sector with organizations from the private and third (non-profit) sectors within public service procurement. The empirical evidence was gathered with a structured online questionnaire that was sent to organizations from the private and third sectors that provide services in the social and healthcare domain. The results indicate that in collaborative relationships in public service procurement, the higher the perceived relationship risks are, the more positive effects they will have in terms of increasing trust, communication, and the quality of collaboration management. Furthermore, communication, governance, and administration have strong influences on collaboration fluency.     

Inter-organizational communication as a relational competency: Antecedents and performance outcomes in collaborative buyer–supplier relationships

Inter-organizational communication has been documented as a critical factor in promoting strategic collaboration among firms. In this paper, we seek to extend the stream of research in supply chain management by systematically investigating the antecedents and performance outcomes of inter-organizational communication. Specifically, inter-organizational communication is proposed as a relational competency that may yield strategic advantages for supply chain partners. Using structural equation modeling, we empirically test a number of hypothesized relationships based on a sample of over 200 United States firms. Our results provide strong support for the notion of inter-organizational communication as a relational competency that enhances buyers’ and suppliers’ performance. Implications for future research and practice are offered.     

Service triads: A research agenda for buyer–supplier–customer triads in business services

Service triads, in which a buyer contracts with a supplier to deliver services directly to the buyer's customer, represent an emerging business model. This special issue is dedicated to this theme. To set the context, in this lead article, we first define service triads, both as a phenomenon and a research topic. We then provide a review of different strands of existing research and various theoretical frameworks that can inform our study of service triads. This culminates in an outline of a research agenda that can guide future study. As such, this paper not only introduces the articles in the special issue, but is also intended as a point of reference and motivation for further work on service triads, and on triads in general.     

A providers’ perspective on supplier relationships in performance-based contracting

As companies are concentrating on core competencies, they increasingly require their suppliers to provide full solutions rather than individual offerings. Many of these solutions, a specific one being “performance-based contracting” (PBC), require a systems integration approach from the providers, who strongly depend on their sub-suppliers’ contributions. Yet, while research on PBC is increasing and some implications for the customer–provider relationship have been identified, no study has been undertaken to analyse the implications of PBC on the upstream suppliers, specifically how the relationship is impacted by results-oriented concepts such as PBC, how suppliers are aligned to the PBC outcome and how they participate in the performance-based compensation. This paper seeks to address this gap, combining a theoretical approach and an empirical approach. The challenges resulting from PBC on the supplier relationships of PBC providers are first analysed from an information economics perspective. Then, a case study approach with insights from typical PBC industries such as defence or aerospace was used to validate and enhance the study. The findings show that despite opposing assumptions in previous literature, PBC suppliers are not involved into the concept’s specifics in a dedicated way, giving away the potentials of a proper alignment. Based on this, a governance portfolio model for the PBC providers’ supplier relationships is developed. The paper is concluded with managerial and theoretical implications.     

Picking on the new kid: Firm newness and deception in buyer–supplier negotiations

This study builds on liabilities of newness theory and moral disengagement theory to investigate deceptive behavior in buyer–supplier negotiations that involve new ventures. Using two purchasing negotiation experiments, it contrasts how negotiators treat employees of new ventures, mature firms, and firms of unknown age. The first experiment examined the behavior of participants in their role as salespeople toward buyers, whereas the second one examined the behavior of participants in their role as buyers toward salespeople. Across experiments, participants shared the belief that their negotiation counterparts were less experienced when these counterparts worked for new ventures than when they worked for mature firms. Moreover, both groups were more likely to deceive negotiation counterparts working at new ventures, although this effect was stronger in magnitude in the first experiment. These findings contribute to the field of behavioral supply management by identifying a new situational variable (firm newness) that promotes deception in purchasing negotiations. Moreover, they provide implications for buyers and suppliers on how to leverage preconceptions associated with their firm's age to gain advantages (or avoid disadvantages) in buyer–supplier negotiations. Finally, we add to liabilities of newness theory by identifying an additional liability that affects new ventures – namely, the increased risk of being deceived.     

Financing buyer–supplier dyads: an empirical analysis on financial collaboration in the supply chain

Awareness of capital commitment in the context of supply management has increased tremendously in recent years. However, researchers often only consider the intra-organisational perspective of financing. Consequently, a great optimisation potential, especially in globally dispersed supply chains, remains unlocked. To address this research gap, this paper presents a conceptual research model with hypotheses derived from principal–agent theory to explain the role of collaboration in the context of financing a buyer–supplier dyad and its effect on the resulting financing performance. A cross-industry survey yielding 145 responses was used to empirically test the hypotheses. The results indicate that both strategy alignment between purchasing and finance departments (intra-firm financial collaboration) as well as in the buyer–supplier dyad (inter-organisational financial collaboration) have a significant positive effect on the overall financing performance. These findings provide researchers and practitioners with a clearer understanding of upstream-oriented supply chain finance and the possibilities and constraints in its implementation.     

Pattern of information technology use: The impact on buyer–suppler coordination and performance

The use of information technologies between supply chain organizations has been shown to promote organizational coordination and have a positive impact on performance. Drawing from organizational theories of learning, we build on this research by proposing a model that relates the pattern of supplier use of IT to specific types of supply chain coordination activities and a comprehensive set of organizational benefits. Specifically, we evaluate how two patterns of IT use by suppliers (exploitation and exploration) relate to two specific types of coordination activities with their buyers (operational and strategic coordination), which in turn are posited to promote specific organizational benefits. Using data from 241 first-tier OEM suppliers in the computer industry, our findings show that each pattern of IT use directly promotes a specific type of coordination activity. Although both types of coordination activities are needed to achieve both strategic and operational benefits, we find each coordination activity to be uniquely promoted by a specific pattern of IT use. IT use for exploitation is found to be an antecedent to operational coordination; IT use for exploration is found to be an antecedent to strategic coordination. No crossover between pattern of use and coordination activities is found. Our findings show that to achieve a complete set of benefits, suppliers must ultimately use IT for both exploration and exploitation. These findings provide a deeper understanding of the mechanism of how the pattern of IT use can result in a comprehensive set of organizational benefits for supplier firms.     

The significance of sustained entrepreneurial orientation on performance of firms – A longitudinal analysis

This study focuses on the importance of changes in entrepreneurial orientation (EO) over time for subsequent firm performance, and the significance which inimitable resources (networks, governance system and unique competence) might have in this connection. Hypotheses are developed to test the effects that changes in EO level over a time period and resources have on subsequent firm performance. The study is based on data from 168 Norwegian SMEs, interviewed both in 2000 and 2003. The primary contribution of this study is that a change in EO over time (increased or decreased), may be of importance for a firm's performance represented by performance compared to competitors, and employment growth. A focus on entrepreneurial activities seems to be beneficial in the long run (increasing EO), while the opposite is the case if the EO level decreases. It is especially encouraging to see that firms focusing on EO (increased or the same) are positively associated with employment growth, one of the primary policy goals world-wide. Another contribution from this study is that resources that may be inimitable for firms have some influence on performance compared to competitors. Implications for policy-makers, practitioners and further research are discussed.     

The effects of an environmental accountability system on local environmental governance and firms’ emissions

The Chinese central government introduced the environmental accountability system (EAS) policy in 2006 to encourage local governments to execute environmental policies appropriately. However, the effects of this EAS policy have not been investigated at the firm level. In this study, we first measured the environmental governance intensity of local governments by calculating the environment word portion (EWP) of the annual governments’ work reports and found that local governments increased their efforts after the EAS policy implementation. We then constructed a continuous difference-in-difference (DID) strategy to estimate the effect of the EAS on firms’ emission and found that firms significantly reduced their sulphur dioxide (SO₂) emission under the regulation intensity of local governments after the EAS policy. The reductions are mainly because of the private, non-export, labour- and capital-intensive firms. The EAS policy may encourage firms to reduce coal usage, design more products, decrease capacity investment and even withdraw from the market, thus reducing pollutant emission. Finally, we tested firms’ response in various polluting sectors and found that the EAS policy may cause local governments to fail in distinguishing low pollution sectors from high pollution sectors.